Create a Trial Balance and Income Statement

Cash                                     $18,470   
A/R                                         14,333                           
Advertising Supplies                   3,998
Prepaid Insurance                     23,137
Equipment                              135,495
A/D – Equipment                     $19,207
Accounts Payable                       11,998
Unearned Service Revenue          14,336
Notes Payable                             62,679
Common Stock                            67,546
Retained Earnings                         19,667   
Totals                                         $195,433              

During the month of July, the following occurred:
July 2    received $8,127 of the prior month’s receivables
July 3    paid $5,220 of the prior month’s accounts payable and paid $3,200 for July rent
July 5    earned $6,736 worth of the prior month’s unearned revenue
July 6    provided a service and billed the client $3,376
July 9    bought advertising supplies for $2,217 on account
July 10    received $4,200 for a service to be provided
July 11    provided a service and billed the client $7,366
July 12    collected $9,127 of receivables
July 13    paid $7,500 of the notes payable
July 16    bought advertising supplies for $1,189 cash
July 18    provided a service and billed the client $4,934
July 20    received $2,700 for a service to be provided   
July 23    paid $4,223 travel expense (all for July travel)
July 24    paid $2,400 of accounts payable
July 25    paid temporary employees $3,356 of wages (all for July work)
July 26    paid $5,000 of the notes payable
July 27    paid the shareholder a $3,000 dividend
July 30    provided a service fully earning the $4,200 from July 10
July 31    paid the shareholder a $4,500 dividend


Required – Part A

Part A1    provide general journal entries in general journal form for the above transactions
Part A2    create a trial balance at July 31 fully taking into account the beginning balances and thegeneral journal entries recorded in part A1 (t-accounts are recommended for key accounts; do not hand them in t-accounts)


Adjusting Entry Information
a.    the insurance expires at a rate of $1,218 per month
b.    a month-end count reveals about $2,400 of advertising supplies remain on-hand
c.    annual depreciation (straight-line is used) is $19,356
d.    a thorough analysis reveals only $3,200 of the unearned revenue is not yet earned at month-end
e.    the interest on the N/P for the month is $418 (hint: don’t increase the principal of the note)
f.    estimated expenses for the month are $2,100 utilities and $800 telephone
g.    a bank reconciliation reveals that a $4,000 payment from a client (A/R) was not recorded

Required – Part B

Part B1    provide adjusting journal entries, in general journal form, for the above
Part B2    create an adjusted trial balance
Part B3    create an income statement and a statement of retained earnings for the month of July
Part B4    create a balance sheet at 7/31/12
Part B5    provide closing entries in general journal form